As Scandinavian Tobacco Group enters the next gen arena with its new XQS nic pouches, Prianka Jhingan, UK Head of Marketing at STG, explains how the best things come in small packages
Can you please give an overview of your brand
Earlier this summer STG UK entered the next gen nicotine category with the launch of XQS pouches. This new range has been created in Sweden, the home of nicotine pouches, and has been available from May onwards, competitively priced at just £5.50. XQS has launched in a range four great flavours with a variety of strengths: Tropical, Blueberry Mint, Cool Ice and Arctic Freeze. While the Tropical and Blueberry Mint variants give users a fruity burst of flavour, the Cool Ice and Arctic Freeze variants offer minty flavour and an icy, cooling sensation. All four variants come in fully recyclable packaging and smaller-sized pouches for a better fit.
How is your brand currently performing?
It’s very early days, but the anecdotal evidence we’re getting from retailers and consumers is already very positive. We really believe in this brand and think it genuinely brings something different to the market, and that’s for two specific reasons. Firstly, and most importantly, XQS is all about high quality and long-lasting flavour which we feel confident is better than the other brands out there. We know once consumers try it, they love it! Secondly, it would be the uniquely smaller-sized pouches which ensure a perfect and delicate fit under the lip.
How is the nicotine pouch market currently performing?
Nicotine pouch sales are really gathering pace in the UK, with the category now worth just over £90m* in annual retail sales – and this figure doesn’t include sales taking place online. This is because many adult smokers have been transitioning over to next gen products such nicotine pouches over the last few years, so they have become an increasingly important part of the mix for convenience retailers. And with the upcoming disposable vape ban due in April next year, this is likely to mean many more consumers will be looking for alternative next gen products, so we’d advise retailers to talk to their regular customers to let them know what their options are. Nicotine pouches like XQS are likely to see a surge in sales as they offer consumers a very credible and attractive alternative due to their exciting flavours, discreet nature and ease of use.
I think in general nicotine pouches tend to be consumed by a mix of customers. Almost certainly the largest group will be transitioning smokers who are moving away from tobacco and into the next gen nicotine category. But there are also other groups who are enjoying nicotine pouches too, whether they be young urban professionals, trend setters or more socially conscious young adults. For XQS, we believe our sweet spot is targeting those young urban professionals and trend setters who are existing pouch users and value taste, quality and are willing to try new innovative brands.
How are you supporting your brand and NPD?
Firstly, from a trade perspective, our growing sales force is connecting with thousands of convenience retailers on their visits this summer to talk them through XQS and explain what merchandising and point-of-sale materials are on offer to help maximise sales. To complement that, we also have a series of educational wholesale depot days planned throughout the remainder of the year, when we will visit high-footfall wholesalers to showcase XQS, talk about our strong brand heritage and talk the visiting retailers through the uniqueness of the product. So, watch out for those!
Then, to help drive consumer demand we also have a major summer activation program underway to get “cans to hands” and help bring XQS into the minds and pockets of thousands of consumers in a variety of ways. This will include an exciting mix of sampling at festivals, city sampling takeovers in major cities across the UK, office-drops and social media advertising.
How important are independent retailers to your brand?
Independent retailers are very important, as a large percentage of pouch sales go through them, so our sales reps are working hard to give retailers the information and sales material they need to ensure the launch of XQS is a success in their stores. As it’s a new entry into the category which consumers may not yet be aware of, XQS is best cited in multiple locations in-store. We currently offer three different display solutions to accommodate varying store space availability and to ensure maximum visibility to those entering the store. We’re confident the bold and colourful branding really stands out in store which, along with the prominent RRP communication, should prove attractive to existing nicotine pouch users.
What trends are occurring in the sector?
Nicotine pouch users are motivated by flavour more than anything, which is one of the reasons we feel so confident in the future for XQS. The predominant flavour is definitely mint but fruity flavours are also proving popular with consumers. Aside from flavour, there is also a move towards stronger variants with nearly three quarters of sales classed as “strong” or “extra strong”.
Describe your brand in three words …
Disruptive, Irresistible, Bold
*IRI Marketplace, Value and Volume sales, Time Period: Apr 2024
